The Securities Exchange Board of India (SEBI)’s recent crackdown on influencers, just a month before the festive season kicks in, is set to impact festive marketing spends of brands in the BFSI category, say industry experts. Brands that were in talks with influencers, are now re-evaluating their choices and doing multiple rounds of due diligence. “In the short term, we do expect BFSI brands to proceed carefully because they wouldn’t want to flout SEBI rules,” said Kalyan Kumar, CEO of influencer marketing company Klug Klug.
In the past, The Advertising Standards Council of India had also implemented regulations with respect to the BFSI space that required finfluencers to clearly disclose their association with financial products, services, or brands that they promote. This disclosure is supposed to be prominently displayed in a manner that is easily noticeable to the audience.
According to Kumar, “While a lot of regulations had been implemented earlier, there was a lot in the grey. But it is much clearer now--finfluencers can educate but not advise. So, for brands to get consumers on board directly using finfluencers is a no-go now. This will lead to a reduction in spends on the same in the short term.”
Experts say that from a festive season perspective, marketing plans for the season are planned way ahead in the financial year. With this news, marketing plans for BFSI brands with respect to influencers will go for a toss, shared Shradha Agarwal, Co-founder, Grapes. She mentioned that the finance influencers who were basically looking forward to driving this kind of work and earning a living out of it are going to get impacted. While the agency’s fintech clients are continuing with their plans for now, in parallel they are also keeping an eye out about the changes that are coming in. She said that there is not much clarity about the topic to the marketers.
Sharing some examples of how unregistered influencers impacted the industry and consumer behaviour, Aabhinna Suresh Khare, Chief Digital & Marketing Officer and Head of Strategy, Bajaj Capital, said, “We often get consumers who say that they have heard from a certain influencer that they will get 15% return on their investment, then why are we not suggesting those schemes.” He explained further that most of the time when that portion is done, that deal is made, that video is shot, nobody is doing the risk moderation for the client.
According to Khare, this regulation will bring in a lot of sanity into the influencer marketing game. Bajaj Capital allots around 7-8% of its digital advertising budget to influencer marketing. Of this allotted amount, around 30% goes into the ‘finfluencer’ space.
The company’s festive marketing plans with respect to influencers is set to be tweaked, more from a content lens than spends lens. Shared Khare, “Going forward, the content has to change and we will be onboarding people selectively,” he mentioned.
What should SEBI expect from finfluencers & brands going forward?
According to Agarwal, there are a couple of methods both sides might adopt in order to cope with the regulation. One of the ways is that the posts might start going up without the sponsored link. “So, they will look forward to driving this hush hush without saying that there is a sponsored link,” she mentioned.
Another way is that brands might start getting into listicles curated by fintech journalists that compare schemes or plans, to make it look more organic in nature. “I think these are two ways that people have to look forward to – changing their creative narrative and their relationship narrative so that they can make it look a little more organic and doesn't take very long.”
To at least cover up for the festive season, Agarwal added, brands might use the influencer deals that were cracked beforehand. “They can showcase that the video was shot beforehand, it was just supposed to go live now, because whenever a new rule comes in place, it takes some time for that rule to get associated with and attached to it,” she said.
Lastly, Agarwal also fears that a lot of startups may not follow the regulation. “Startups generally go and do a lot of things without bothering about these rules, thinking they will not get caught,” she said.
The question experts are raising now is that while SEBI can track hundreds of them, a regular monitoring of thousands of influencers is difficult unless there is a war room! “If they don't have a war room to track every influencer, every mention of a startup or a brand name or any keyword, I don't know how they will do it. And there are so many ways of just putting up a video without making it noticed in the caption,” Agarwal highlighted.
Experts note that releasing a rule is easy, but tracking its implementation on digital is a mammoth task. While the intent is in the right place, will SEBI be able to execute it to the fullest? Only time will tell.
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